Arrow Electronics (ARW) investor relations material

Executive summary

• Second quarter 2026 revenue reached $10 billion, up 32% year-over-year, surpassing guidance, with Global Components up 39% and ECS up 14%.

• Non-GAAP EPS rose 124% year-over-year to $5.45, with GAAP EPS at $5.26, both above the high end of guidance.

• Operating margin expanded 120 basis points to 4% (non-GAAP), with operating income nearly doubling to $377 million.

• Growth was driven by broad-based demand, especially from AI infrastructure expansion, and supported by strong backlog and book-to-bill ratios.

• The business remains well-positioned in secular growth markets, with a diversified model and ongoing investments in innovation and customer enablement.

Financial highlights

• Sales increased $2.4 billion year-over-year to $10 billion, exceeding guidance and up 30% on a constant currency basis.

• Non-GAAP net income attributable to shareholders increased 122% year-over-year to $283 million; GAAP net income was $273 million, up 45%.

• Non-GAAP operating income rose $188 million to $403 million; gross margin held at 11.2–11.3%.

• Cash flow from operating activities was $318 million for the quarter, over $1 billion year-to-date.

• Gross balance sheet debt declined to $2.2 billion, down $300 million sequentially and $650 million year-over-year.

Outlook and guidance

• Q3 2026 consolidated sales expected between $9.60 billion and $10.20 billion, with non-GAAP diluted EPS guidance of $4.83–$5.03.

• Global Components sales forecasted at $7.5–$7.9 billion; ECS sales at $2.1–$2.3 billion.

• Average tax rate projected at 23–25%; interest expense around $50 million.

• Foreign currency expected to reduce Q3 sales by $27 million and EPS by $0.01 year-over-year.

• Management expects continued AI-driven demand but notes uncertainty due to geopolitical and economic factors.